(2019-07-09) Quillette Fully Automated Luxury Communisma Review

Kristian Niemietz: Fully Automated Luxury Communism: A Review. ...Karl Marx’s ambivalent attitude towards capitalism. Disgusted as he most famously was by capitalism’s excesses, he was clearly also impressed by its immense productive potential. He reconciled these conflicting impulses by dreaming up a theory of history in which capitalism represented a necessary but transient stage in the story of human progress.

I get the impression that Aaron Bastani sees a lot of himself in that Marx quote. Bastani is clearly fascinated by technological progress; in fact, he talks more about that than about communism. Fully Automated Luxury Communism (FALC) is really two books in one—a technology book, and a communism book

My guess is that, if pushed, Bastani would probably (if somewhat grudgingly) concede that this cornucopia of technological wonders is, to a very large extent, a product of capitalism. Yes, publicly funded research has also played a role. But there is a rather large difference between developing the basic outlines of a technology, and turning it into a useful, scalable product that customers want to buy. The latter requires entrepreneurship, competition, and consumer sovereignty.

Marx thought that the technological advances brought forth by what Bastani calls the “Second Disruption” (the Industrial Revolution) were creating the conditions for socialism. Bastani argues that this was premature, and that capitalism first had to reach a higher stage—a stage Marx could not possibly have foreseen. Bastani calls this the “Third Disruption,” by which he means, loosely, the technological changes (technological revolution) we are experiencing today. This, he insists, is the stage that finally makes it possible—and necessary—to move beyond capitalism.

Capitalists see abundance as a threat, which they will fight tooth and nail. They will try to create artificial scarcity where scarcity no longer needs to exist:

In FALC, the demise of capitalism is not something that will occur in the distant future, but something which is already well underway. He identifies 2008 as the crucial turning point, the beginning of capitalism’s inevitable demise. (Credit Crisis 2008)

So, what would the path to Fully Automated Luxury Communism look like? Bastani sketches out a partial roadmap. Firstly, at the national level, there would be an immediate end to outsourcing by the public sector. Public sector organisations would provide the full range of services they are supposed to provide in-house, rather than involving external contractors. There would, for example, be no private rail operators anymore.

At the local level, meanwhile, there would be a programme of “municipal protectionism.” Public sector bodies and related organisations would spend as much of their budgets as possible locally, in order to retain money in the local economy, rather than allowing it to leak out

There would also be a network of state-owned local and regional banks, pursuing similar objectives

Bastani briefly toys with the idea of Universal Basic Income (UBI), but quickly dismisses it in favour of the in-kind version, Universal Basic Services (UBS).

Taken together, such measures would create a heavily state-dominated, hyper-politicised economy. This is where Bastani’s road map ends. What the final steps towards full communism would look like—or, indeed, what FALC itself would look like in practice—does not become clear.

There are a number of major problems with all this. Firstly, the idea that capitalism cannot cope with “extreme supply” is absurd. Visit any supermarket, and you will find hundreds of products that would once have been quite expensive, and which anyone can now purchase for a trivial sum.

That, at least, was the old-fashioned way. Today, some of the richest people in the world, such as the founders of Google or Facebook, have made their fortunes by offering services that are essentially free at the point of use. They do not need to charge individual users for individual transactions. They have found other, more creative ways to make money from offering those services.

This is not applicable to every sector, and there are indeed examples of “extreme supply” leading to the disappearance of an industry. Travel agents are a good example

But this is simply the “creative destruction” of the market economy in action. Business models and industries become obsolete and disappear, and new ones emerge to take their place

What about Bastani’s policy programme?

Virtually all economists, including vocal left-wingers such as Paul Krugman and Joseph Stiglitz, agree on the benefits of free trade, and the inadequacy of protectionism. If this is true at the national level, it must be a fortiori true at the local level, which makes “municipal protectionism” a complete non-starter.

Bastani’s claim that outsourcing is, in some way, central to neoliberalism is equally silly. If it is so central, why does he not produce a single quote from a pro-market economist advocating it?

UBS suffers from the same problems as UBI, plus various additional ones. Most Western welfare systems are not particularly well targeted now, and a UBI would exacerbate that by an order of magnitude; it would essentially mean handing out billions of pounds to people who do not need it. The same is, by extension, true of UBS. But UBI at least gives recipients freedom of choice—it is up to them what they want to spend their UBI on. UBS denies recipients that freedom—it is like a version of UBI in which every pound is earmarked for a specific purpose, only worse

Bastani’s argument is not that we should wait for another 100 years or so until the technology is sufficiently advanced, and then move straight from capitalism to communism. He wants the transition to start today—or, better still, yesterday—and he envisages a long transition period, during which our economy would no longer be capitalist, but not yet communist either.There is a word for this: socialism. Like almost every other communist before him, Bastani wants to reach communism via socialism. Thus, the fact that socialism has already been tried more than two dozen times, and failed every time without exception, should be somewhat relevant to this book. But on that issue, Bastani has next to nothing to say.